In one of his final major reforms before departing from Federal politics, Minister for Financial Services Stephen Jones has announced significant changes to the education standards for financial advisers. These changes aim to make the profession more accessible, particularly to newcomers, by relaxing the requirement for a specialized financial planning degree.
Historically, aspiring financial advisers were required to complete a specific financial planning degree, a barrier that Jones believes has deterred both school-leavers and those looking to transition from other careers. By removing this degree requirement, the new policy allows individuals holding any bachelor’s degree or higher qualification to enter the profession, provided they meet certain educational prerequisites in financial concepts like finance, economics, or accounting.
Jones emphasized that while the new requirements would open the door to more diverse entrants, the importance of tertiary education in maintaining the profession’s standards would still be upheld. “Prospective advisers will still need to complete core subjects covering ethics, legal obligations, consumer behavior, and the financial advice process,” he explained. This streamlined pathway will particularly benefit career changers, who may only need to complete financial advice-specific coursework if their prior degree already covered relevant topics.
This shift aims to reduce the time and cost associated with entering the profession, with Jones stating that the new requirements would halve the time and expenses for students with degrees in commerce, economics, or finance. It will also ease the transition for those moving from other financial services sectors.
To further ensure that the profession attracts a steady stream of new talent, existing advisers will be required to comply with the new degree qualifications by January 1, 2026. While Jones acknowledged the efforts of those who have already navigated the existing qualification requirements, he stressed that the status quo is unsustainable, especially as the demand for financial advice grows due to an aging population, with five million Australians nearing or entering retirement.
The reforms are also aligned with broader legislative efforts under the government’s Delivering Better Financial Outcomes initiative, aimed at establishing clear and accessible entry points into the profession. The number of practicing advisers has sharply declined since the introduction of the degree requirement, from 28,000 to approximately 15,600 today. The industry has struggled to attract newcomers at the same rate as experienced advisers have exited.
Reflecting on past challenges, Jones noted that the implementation of the degree qualification requirement had been poorly handled. Many long-time advisers, who had built strong careers, were forced to go back to university or leave the profession altogether. In response to this crisis, the government introduced an “experience pathway” to allow seasoned advisers with a clean record to remain in the profession. Around a quarter of remaining advisers have taken advantage of this option, potentially saving the industry from an even greater loss of experienced professionals.
Jones concluded by stating that these reforms were designed to keep the pathway into financial advice as open and accessible as possible, ensuring the industry’s viability in the face of increasing demand for services.
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